Financial Times FT.com

Subprime questions hinder mortgage security valuations

By Saskia Scholtes in New York

Published: October 9 2007 20:48 | Last updated: October 9 2007 20:48

Banks and investors are still struggling to value mortgage securities backed by subprime home loans more than four months after valuation disputes came to light and helped precipitate the collapse of two high-profile hedge funds managed by Bear Stearns.

The problems forced several hedge funds to the brink of collapse during the summer’s financial turmoil, and others to suspend investor withdrawals because they were unable to properly value their portfolios.

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